Write-off of Tax Arrears for Entrepreneurs – Everything You Need to Know

In What Situation Can You Submit an Application for Tax Arrears Write-off?

Tax arrears write-off is granted ex officio only in four strictly defined situations (e.g., in the case of the taxpayer’s death when they leave no assets or leave assets not subject to enforcement). In situations other than those specified in the regulations (detailed information can be found, for example, on government websites), it is necessary to submit an application to the appropriate tax authority. Each application is considered individually. Please note that even a correctly submitted document does not guarantee the granting of relief! The official may request additional information, such as about the financial situation of the entrepreneur applying for the write-off and their family. When considering the application, the authority takes into account two issues: the taxpayer’s important interest and the public interest. What do these terms mean? The tax authority may consider the taxpayer’s important interest to be, for example, a situation in which the entrepreneur loses the ability to earn income or loses all assets as a result of unforeseen circumstances. The authority may also approve the taxpayer’s application due to public interest, i.e., a situation in which the entrepreneur, after being denied payment write-off, would have to seek assistance from the state.

Who Can Benefit from Tax Arrears Write-off?

An application for tax write-off can be submitted not only by the taxpayer but also by their heir or even a third party. If the authority considers it favorably, the taxpayer can expect a write-off of tax arrears or late payment interest (in part or in full) as well as a write-off of the extension fee.

How to Submit an Application for Tax Write-off?

You can submit an application for tax interest write-off in three ways: in person at the office, by mail, or electronically. Handling the matter online without leaving home requires setting up a Trusted Profile or having a qualified electronic signature.

When Should You Submit an Application for Tax Arrears Write-off? The document should be submitted to the office no earlier than one day after the payment deadline. However, it is not advisable to delay too long. If the office does not consider your application justified for certain reasons, it will also add interest to the outstanding amount.

Tax Write-off and the Anti-Crisis Shield

The issue of tax arrears write-off has become particularly important for entrepreneurs who lost the ability to earn income during the coronavirus pandemic. How has the Anti-Crisis Shield affected tax arrears write-off? Due to the prolonged state of epidemic, entrepreneurs can expect facilitations, e.g., taxpayers who are unable to pay overdue contributions do not have to attach documents to the application that would confirm the information described therein.